Maple Leaf Foods Q3 loss $12.9M after $42.9M in listeria-contamination costs

Oct 29, 2008 The Canadian Press

TORONTO - Maple Leaf Foods Inc. (TSX: MFI) has reported a summer-quarter loss of
$12.9 million, dragged down by $42.9 million in recall, restructuring and other
costs related to the listeria contamination of products from its Toronto
packaged-meat plant.

The quarterly loss, worth 10 cents per share, compares with a year-earlier profit of
$220.4 million or $1.67 per share, which included a $218.7-million gain on
discontinued operations.

Sales edged up to $1.34 billion, from $1.30 billion a year ago.

Excluding the food-poisoning disaster which killed 20 people across Canada, Maple
Leaf said it would have earned 13 cents per share, compared with six cents per share
a year ago, thanks to "improved commodity markets, protein restructuring and price
increases."

The recall from the Bartor Road facility is complete "and actions are underway to
restore sales and volumes," the 23,500-employee company stated.

"In other areas of our business, results improved considerably and as expected we
are starting to see material benefits from the restructuring of our protein
operations," said CEO Michael McCain.

"Our focus through the remainder of 2008 will be on stabilizing our business and
continuing to restore confidence, including implementing an enhanced food safety
program that will be among the best in North America."

The "strategic reorganization" of Maple Leaf's meat operations entails reducing
fresh pork processing operations and focusing on higher-profit packaged meat and
processed meals.

Maple Leaf closed its Winnipeg pork plant during the third quarter and it is trying
to sell its Burlington, Ont., plant which processes over two million hogs annually.
Also during the quarter, a double shift expansion was completed at the Brandon,
Man., plant which will be Maple Leaf's only remaining pork processing site, handling
more than four million animals a year.